FUNDAMENTAL
OVERVIEW
Gold opened lower today
following the breakdown
of US-Iran negotiations over the weekend. I don’t think anybody sane
expected them to reach an agreement on the first round given the strong
divergence in proposals.
There have been reports of US
and Iran continuing to exchange messages through diplomatic backchannels, but
for now we don’t have any official date for another round of negotiations. The
good news is that the ceasefire seems to be holding, but Trump decided to put pressure
on Iran by blockading
their ports.
This has raised the risk of
another escalation and the resumption of the war which is going to keep markets on edge. In the meantime, the hawkish bets on central banks returned and that
is weighing on gold prices. The price action might remain mostly rangebound until
we get some new catalyst.
GOLD TECHNICAL
ANALYSIS – DAILY TIMEFRAME
Gold – daily
On the daily chart, we can
see that gold is consolidating below the 4,800 level. The only clear resistance
we have here is the trendline around the 5,000 level. If the price gets there,
we can expect the sellers to step in with a defined risk above the trendline to
position for a drop into the major upward trendline. The buyers, on the other
hand, will look for a break to increase the bullish bets into new highs.
GOLD TECHNICAL ANALYSIS – 4
HOUR TIMEFRAME
Gold – 4 hour
On the 4 hour chart, the
price broke below the upward trendline that was defining the bullish momentum. We
have now a downward trendline defining the pullback. We can expect the sellers to step in around these levels with a defined risk above the downward trendline
to extend the pullback into the 4,553 level. The buyers, on the other hand,
will look for a break above the downward trendline to pile in for a rally into
the 5,000 level next.
GOLD TECHNICAL ANALYSIS – 1
HOUR TIMEFRAME
Gold – 1 hour
On the 1 hour chart, the
price filled the gap which is now acting as resistance. This is where we can
expect the sellers to step in with a defined risk above the downward trendline
in case the price extends above the resistance. The buyers, on the other hand,
will look for a break above the downward trendline to gain more conviction and
target new highs. The red lines define the average daily range for today.
UPCOMING CATALYSTS
Tomorrow we have the US PPI report. On Thursday, we get the latest US Jobless
Claims figures. The focus remains on US-Iran headlines.